Iced! Iced.... well, yes, iced.

Oct 10, 2008

A quick backgrounder in foreign exchange trading. If you’re a bank and you deal in a non-local currency - say, an American bank dealing in pounds sterling - you need to have an account with a bank in the local country to clear the trade. So, our hypothetical American bank would need to hold an account with a local bank - say, Barclays or RBS - to clear their sterling trades.

“Effectively the krona can’t be traded at the moment because there are no more banks to clear the trade,” said Mick Ankjaer, a foreign-exchange dealer in Copenhagen at Nordea, Scandinavia’s biggest lender.

Oct. 9 (Bloomberg) – Prime Minister Gordon Brown said the U.K. may freeze the assets of Icelandic companies, escalating a dispute over who should compensate British savers with deposits caught up in the collapse of the island’s banking system.

“We’re freezing the assets of Icelandic companies in the U.K. where we can,” Brown told BBC radio today in Birmingham, England. “We will take further action against the Icelandic authorities wherever this is necessary.”__